Universal Insurance Holdings, Inc. Reports Record Results for Second Quarter 2015

Achieved Highest Quarterly Net Income and Diluted EPS in Company History

Aug 04, 2015, 16:22 ET from Universal Insurance Holdings, Inc.

FORT LAUDERDALE, Fla., Aug. 4, 2015 /PRNewswire/ -- Universal Insurance Holdings, Inc. (NYSE: UVE) (or the "Company") today reported record net income for the second quarter of 2015 of $24.7 million, an increase of 44.2% ($7.6 million) over the same period in 2014. Diluted earnings per share (EPS) was $0.69 for the second quarter of 2015, an increase of 40.9% ($0.20 per share) over the same quarter in 2014.  This compares to net income of $17.1 million, or $0.49 per diluted share, for the same period in 2014.

"We are pleased to report another record quarter with sequential improvement in multiple financial measures as we continue to focus on excellence in all aspects of our business," said Sean P. Downes, the Company's Chairman, President and Chief Executive Officer.  "The hard work and dedication of our tremendous employees as well as our loyal agency force continue to be key factors to our success.  With the help of our peer leading agency force, we continue to focus on writing organically grown rate adequate business in all of our active states.

"We believe that the strategic changes and improvements we made to our reinsurance program will continue to drive financial improvements.  Specifically, our 2015/2016 reinsurance program provides us with the necessary protection from significant storms and allows us, as a result of our improved capital position, to retain a greater share of our profitable business through the elimination of the quota share agreement.  Our second quarter results reflect just one month of this quota share elimination, and we look forward to realizing additional value moving forward.  

"As we enter the second half of the year, we remain confident in our ability to increase market share by targeting profitable, rate adequate business from our growing distribution channels, improve our financial condition, continue our geographic expansion efforts and deliver increasing returns to shareholders."

Second-Quarter 2015 & Recent Highlights

  • Net earned premiums grew by $39.5 million, or 53.9%, to $112.9 million.
  • Total revenues increased by $36.6 million, or 42.1%, to $123.6 million.
  • Net income increased by $7.6 million, or 44.2%, to $24.7 million.
  • Diluted EPS grew by $0.20, or 40.9%, to $0.69 per share.
  • Paid dividends of $0.12 per share.
  • Eliminated quota share reinsurance with 2015-2016 reinsurance program.
  • Received Certificates of Authority from Michigan, Minnesota and Virginia.

Second-Quarter 2015 Results

Net income for the second quarter of 2015 of $24.7 million reflects an improvement across multiple measures including an increase in direct premiums written, net premiums written, net earned premiums, policy fees, net investment income and improvements in our loss ratio. The increase in net earned premiums reflects both growth in policies in force and lower reinsurance costs, including the reduction in the cession rate of the Company's quota share reinsurance contracts to 30% effective June 2014, followed by the elimination of quota share reinsurance effective June 2015.  To a lesser degree but an important strategic initiative is diversification of premium outside of Florida as the Company is now licensed to write premium in 13 states. The loss and loss adjustment expense ratio was improved to 35.2% in the second quarter of 2015 compared to 37.7% for the second quarter of 2014.  The Company's initiatives to expedite claims have resulted in savings, reducing the severity and duration of claims and costs associated with handling of claims. 

Stockholders' equity reached an all-time high of $255.3 million as of June 30, 2015 compared to $218.9 million (pro-forma) as of December 31, 2014.

First Six-Months 2015 Results

For the first six months of 2015, the Company's net income was $47.0 million, an increase of $16.4 million, or 53.3%, compared to the same period of 2014.  Diluted earnings per share for the first six months of 2015 was $1.31, an increase of $0.44, or 51.0%, compared to the same period of 2014.

Cash Dividends

On April 13, 2015, the Company announced that its board of directors declared a cash dividend of $0.12 per share of common stock which was paid on July 2, 2015 to shareholders of record on June 18, 2015.

If declared and paid as intended, the annual aggregate dividend in 2015 will be $0.48 for each common share.

Financial Results Presentation

The Company will make available an audio recording of a presentation discussing its second quarter 2015 financial results at approximately 5:00 pm Eastern on August 4, 2015. The presentation will be pre-recorded and there will be no opportunity for live questions. The audio recording of this presentation will be available at www.universalinsuranceholdings.com until September 4, 2015.

About Universal Insurance Holdings, Inc. Universal Insurance Holdings, Inc., with its wholly-owned subsidiaries, is a vertically integrated insurance holding company performing all aspects of insurance underwriting, distribution and claims. Universal Property & Casualty Insurance Company (UPCIC), a wholly-owned subsidiary of the Company, is one of the leading writers of homeowners insurance in Florida and is now fully licensed and has commenced its operations in North Carolina, South Carolina, Hawaii, Georgia, Massachusetts, Maryland, Delaware, Indiana and Pennsylvania.  American Platinum Property and Casualty Insurance Company, also a wholly-owned subsidiary, currently writes homeowners multi-peril insurance on Florida homes valued in excess of $1 million, which are limits and coverages currently not targeted through its affiliate UPCIC.  For additional information on the Company, please visit our investor relations website at www.universalinsuranceholdings.com.

Forward-Looking Statements and Risk Factors This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such statements may include commentary on plans, products and lines of business, marketing arrangements, reinsurance programs and other business developments and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future results could differ materially from those described and the Company undertakes no obligation to correct or update any forward-looking statements. For further information regarding risk factors that could affect the Company's operations and future results, refer to the Company's reports filed with the Securities and Exchange Commission, including Form 10-K for the year ended December 31, 2014 and Form 10-Q for the quarter ended June 30, 2015.

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except per share data)

June 30,

December 31,

ASSETS

2015

2014

Cash and cash equivalents

$          213,330

$       115,397

Restricted cash and cash equivalents

2,635

2,635

Fixed maturities, at fair value

359,589

353,949

Equity securities, at fair value

38,515

19,642

Short-term investments, at fair value

100,025

49,990

Investment real estate, net

5,849

Prepaid reinsurance premiums

110,739

190,505

Reinsurance recoverable

38,157

55,187

Reinsurance receivable, net

716

7,468

Premiums receivable, net

59,171

50,987

Other receivables

4,524

2,763

Property and equipment, net

23,818

17,254

Deferred policy acquisition costs, net

62,181

25,660

Income taxes recoverable

12,949

5,675

Deferred income tax asset, net

10,250

11,850

Other assets

4,919

2,812

          Total assets

$       1,047,367

$       911,774

LIABILITIES, CONTINGENTLY REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY

LIABILITIES:

Unpaid losses and loss adjustment expenses

$

112,117

$

134,353

Unearned premiums

455,882

395,748

Advance premium

29,303

17,919

Accounts payable

1,981

4,121

Book overdraft

2,725

5,924

Reinsurance payable, net

131,738

66,066

Income taxes payable

1,659

1,799

Dividends payable to shareholders

4,283

Other liabilities and accrued expenses

27,751

36,318

Long-term debt

24,600

30,610

          Total liabilities

792,039

692,858

Contingently redeemable common stock

19,000

Issued shares - 0 and 1,000

Outstanding shares - 0 and 1,000

STOCKHOLDERS' EQUITY:

Cumulative convertible preferred stock, $.01 par value

     Authorized shares - 1,000

     Issued shares - 10 and 12

     Outstanding shares - 10 and 12

     Minimum liquidation preference, $9.99 and $8.49 per share

Common stock, $.01 par value

456

448

     Authorized shares - 55,000

     Issued shares - 45,562 and 43,769

     Outstanding shares - 35,695 and 34,102

Treasury shares, at cost - 9,867 and 9,667

(67,229)

(62,153)

Additional paid-in capital

62,845

40,987

Accumulated other comprehensive income (loss), net of taxes

(1,721)

(1,835)

Retained earnings

260,977

222,469

          Total stockholders' equity

255,328

199,916

          Total liabilities, contingently redeemable           common stock and stockholders' equity

$ 1,047,367

$ 911,774

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)

Three Months Ended

June 30,

2015

2014

PREMIUMS EARNED AND OTHER REVENUES

Direct premiums written

$      249,971

$      220,009

Ceded premiums written

(7,933)

(76,483)

Net premiums written

242,038

143,526

Change in net unearned premiums

(129,150)

(70,164)

     Premiums earned, net

112,888

73,362

     Net investment income (expense)

1,207

412

     Net realized gains (losses) on investments

110

3,950

     Commission revenue

3,474

3,670

     Policy fees

4,352

3,899

     Other revenue

1,560

1,696

Total premiums earned and other revenues

123,591

86,989

OPERATING COSTS AND EXPENSES

     Losses and loss adjustment expenses

39,704

27,679

     General and administrative expenses

42,667

28,901

Total operating costs and expenses

82,371

56,580

INCOME BEFORE INCOME TAXES

41,220

30,409

Income tax expense

16,516

13,283

NET INCOME

$        24,704

$        17,126

Basic earnings per common share

$            0.71

$            0.50

Weighted average common shares outstanding - Basic

35,019

33,968

Fully diluted earnings per common share

$            0.69

$            0.49

Weighted average common shares outstanding - Diluted

36,002

35,174

Cash dividend declared per common share

$            0.12

$            0.10

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)

Six Months Ended

June 30,

2015

2014

PREMIUMS EARNED AND OTHER REVENUES

Direct premiums written

$      461,576

$      411,926

Ceded premiums written

(114,430)

(198,132)

Net premiums written

347,146

213,794

Change in net unearned premiums

(139,898)

(76,625)

     Premiums earned, net

207,248

137,169

     Net investment income (expense)

2,069

930

     Net realized gains (losses) on investments

281

4,852

     Commission revenue

6,642

7,759

     Policy fees

8,184

7,411

     Other revenue

2,977

3,173

Total premiums earned and other revenues

227,401

161,294

OPERATING COSTS AND EXPENSES

     Losses and loss adjustment expenses

73,294

54,504

     General and administrative expenses

74,864

53,264

Total operating costs and expenses

148,158

107,768

INCOME BEFORE INCOME TAXES

79,243

53,526

Income tax expense

32,209

22,851

NET INCOME

$        47,034

$        30,675

Basic earnings per common share

$            1.35

$            0.91

Weighted average common shares outstanding - Basic

34,800

33,696

Fully diluted earnings per common share

$            1.31

$            0.87

Weighted average common shares outstanding - Diluted

35,987

35,450

Cash dividend declared per common share

$            0.24

$            0.20

 

Investor Contact:  Andy Brimmer / Mahmoud Siddig Joele Frank, Wilkinson Brimmer Katcher 212-355-4449

SOURCE Universal Insurance Holdings, Inc.



RELATED LINKS

http://www.universalinsuranceholdings.com